SMEs’ share in GDP to be 22% in 3 yrs: Assocham

New Delhi: Small and medium enterprises (SMEs) are likely to account for 22% of India’s GDP, up from 17% now, in the next three years on the back of technological upgrade, a study said.

“SMEs’ contribution to GDP is projected to go up to 22% by 2012 from 17% currently,” industry body Assocham said, adding that more than 55% of the units are aggressively upgrading technologically to reduce input cost and increase production.

The chamber also said with increase in efficiency, SMEs’ share in the country’s exports would increase from 40% to over 44% see in the next five years.

It pointed out since the legislation of the Micro, Small and Medium Enterprises Act, 2006, the sector has been liberalized and deregulated to a large extent.

However, the main constraints that the enterprises face are credit shortage and the high rate of interest.

“The sector, employing over 42 million workers, is still neglected mostly by private banks and financial institutions, while the public sector banks in the country have been meeting the mandatory requirement for lending to the units,” Assocham president Sajjan Jindal said.